India’s Metals & Mining Sector: A Powerhouse in Making
India’s metals & mining sector is on the brink of a massive transformation — from being the world’s 2nd-largest steel and aluminum producer to a projected $1.5 trillion powerhouse by 2035. With rising urbanisation, strong policy support, and booming infrastructure demand, the next decade could redefine India’s position in global industrial supply chains.
India's Global Standing
- Steel: India is the 2nd largest crude steel producer globally.
- India is the 2nd largest Aluminum producer, 2nd largest coal producer and 4th largest iron ore producer in the world.
Growth & Demand Drivers
- Steel Capacity projection: By FY31, India aims for 300 MnTPA crude steel capacity and 255 MnTPA production.
| Metric | FY23 | FY24 | FY25 | FY26-26 Target / Projection |
|---|---|---|---|---|
| Finished Steel Consumption (India) | ~ 121 million tonnes | ~ 138 MnT | ~ 149 MnT | Expected to increase aligning with 9-10% growth rate per ICRA for FY26 |
| Crude Steel Production | 127 MnT | ~ 144 MnT | ~ 152 MnT | Target crude steel capacity ~ 300 MT by FY30-31; production projection in same ballpark as capacity goals in coming years |
Source: Link
- India’s iron ore production reached a new high of 289 million metric ton (MMT) in FY25, up 4% from 277 MMT in FY24. (Source : Bigmint - Slide 3)
- Zinc Demand growth : Sweeping growth in infrastructure, automotive, and EV sectors is expected to cause zinc demand to double in 5–10 years.
Sector Outlook & Opportunities
- Future Market Size: India’s metals & mining sector is projected to reach US$ 1.5 trillion by 2035, driven by infrastructure and manufacturing growth.
- Urbanisation Boost: With rapid urbanisation, India is expected to add 400 million urban residents by 2050, creating massive demand for steel, aluminum, and cement.
- Global Cost Edge: India’s cost competitiveness and export potential make it a strong supplier to global markets, especially for steel and aluminium.
- Private Investments: Domestic and global majors are expanding capacity with multi-billion-dollar capex, ensuring sustained sectoral momentum.
Why Metals & Mining is an Attractive Investment
Cost Advantage & Global Competitiveness:
India enjoys a fair advantage in production and conversion costs for steel and alumina—making the industry globally competitive. (Source : Link 1 and Link 2)
Policy Support & Reform Momentum
- The MMDR Amendment Act 2021 enabled captive mine owners to sell up to 50% of production in open markets. (Source : Link)
- In December 2023, the government proposed capping performance security/upfront fees for critical mineral auctions to lower barriers and accelerate lease issuance. (Source : Link)
- Safeguard duties imposed on Steel imports from China will boost domestic production to compensate for the imports. India has already turned a net exported of steel after two years due to these duties.
GDP Contribution & Growth Potential
The mining sector currently contributes around 1.8% to India’s GDP, with the potential to grow to 2.5% by 2026 - 2027. (Source : Link)
India’s per capital steel consumption at 100kgs (FY24 was 59kgs) remains much lower than the global average of 233kgs, thereby implying a sharp uptrend.
Demand Sustainability from Infrastructure & Energy
Demand for metals continues to strengthen, driven by rapid expansion in sectors like infrastructure, power, cement, automobiles, and EVs. (Source : Link and TOI)
Employment and Downstream Value Chain Impact
The mining industry is highly employment-intensive and supports critical downstream sectors (automotive, infrastructure, power), reinforcing its multiplier effect on the economy. (Source : TOI)
Sustainability and ESG Alignment
With growing emphasis on ESG, mining of critical minerals, adoption of green steel, and decarbonisation roadmaps are making the sector increasingly attractive for environmentally responsible investors. (Source : Link)
With India’s industrial momentum rising, metals are back in focus!
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